House Price Index
Best ever spring sellers’ market as prices hit another new record
- Another new price record as the average price of property coming to market jumps by 1.7% (+£5,760) this month to £354,564, breaking through the £350,000 barrier for the first time
- The average monthly rise is the largest seen at this time of year since March 2004, pushing the annual rate of increase to 10.4%, with all regions and countries except London and Scotland now up over 10% annually
- Most expensive sector of four bedrooms plus sees average 3.8% (+£23,619) monthly price surge encouraging new sellers to come to market, with 12% more new listings in this sector than at this time last year
- For those looking to move this is the best ever spring sellers’ market, not just because of record price levels:
- We enter the spring selling season with the biggest mismatch between supply and demand for this time of year ever measured by Rightmove, with more than twice as many buyers as sellers
- Chance of finding a buyer in first week is highest ever, and twice as likely compared to same period in 2019
- Too early to know how the market will be affected by the longer-term economic impact of the abhorrent and devastating war in Ukraine. Rightmove initially saw slightly lower buyer demand but this has now stabilised
- We forecast a less frothy market in the second half of the year, as economic headwinds lead to a more evenly balanced market, though demand will still outstrip supply
The price of property coming to market has hit a new record high for the second consecutive month, with the national average now being £354,564. This month’s 1.7% (+£5,760) increase is the largest at this time of year since March 2004. In addition, the annual rate of 10.4% is the highest that Rightmove has recorded in any month since June 2014. This unprecedented price level is being stoked by the greatest imbalance between buyer demand and the number of properties available for sale that we have ever measured at this time of year. This is the strongest spring sellers’ market that we have ever seen in several metrics.
Tim Bannister, Rightmove’s Director of Property Data comments: “There’s a hat-trick of reasons for home-owners to follow the normal trend and make it their goal to sell this spring. Firstly, the potential to achieve a record price for their property. Secondly, the imbalance between high buyer demand compared to low available property supply is the greatest that we have ever seen for the start of a spring market, meaning that the chance of being able to pick and choose between several suitable buyers is strong. Thirdly, the proportion of properties finding a buyer within the first week is also at an all-time high for this time of year, so sellers with an appropriately priced and well-presented property can expect a shorter marketing period than the norm. Those who weren’t ready to take advantage of last year’s rush now have another chance to get on the market while these conditions last. Many of those who are selling in this record-breaking market obviously also face the prospect of buying again in the same market, and being in fierce competition against other buyers. Having a buyer for your own property, subject to contract, puts those who are buying again in a powerful position compared to buyers who have yet to sell, and agents report that these ‘power buyers’ are more likely to get the property that they want and negotiate the best deal on price.”
There are now more than twice as many buyers as sellers active in the market, which is the biggest mismatch between supply and demand that we have ever recorded at this time of year. The speed of the market is further demonstrated by the fact that are there more than one in five (22%) deals being agreed on Rightmove within the first week of being marketed. This is double the figure for the same period in the more normal market of 2019. Almost half, 47%, are having a sale agreed within the first fortnight, another indicator of high demand and the likelihood of finding a buyer quickly. While these unprecedented numbers are helping to drive prices to new records, they do also show that there are a number of properties that will remain on the market after this time and that may benefit from a price reduction.
Bannister says: “Agents report that despite the current high demand, a price reduction is often needed if a property has not found a buyer within the first two weeks. It could be that the property is too niche and has to wait for the right buyer with those specific requirements to come along, but more often it’s due to prospective buyers being underwhelmed by a seller looking for an over-optimistic asking price compared to other properties that are being snapped up at record speed. Acting quickly on a price reduction before the property goes stale can help to get sellers back on track for a speedier sale.”
The largest monthly price rise has been recorded in the “top of the ladder” sector, predominantly comprising four bedroom or more properties. This has seen a 3.8% (+£23,619) jump due to high demand and the greatest scarcity of supply, though encouragingly for prospective buyers in this sector 12% more properties have come to market in the last month compared to the same period a year ago. However it’s the more mass-market “second-stepper” sector that’s selling fastest, with just over half (50.3%) of these homes finding a buyer within the first two weeks of marketing.
Bannister concludes: “All sectors of the market are experiencing very brisk conditions and we expect the strong market to continue until economic forces combine to move the supply and demand balance closer towards equilibrium. There are headwinds that seem likely to remove the current market froth in the second half of the year. We’ve just seen interest rates rise again, and there are further incremental increases forecast for the year which will raise mortgage rates for some. Inflation and cost of living increases are also likely to affect buyer affordability and market sentiment. It’s too early to know how the UK housing market will be affected by the longer term economic impact of the abhorrent and devastating war in Ukraine, and so all we can use as a measure for now is the level of UK buyer and seller activity. When the war started we initially saw slightly lower buyer demand but this has now stabilised. Our forecast is that overall transaction numbers for 2022 will revert back to pre-pandemic levels, as the market returns to a more even balance. Currently, the number of sales being agreed by estate agents is 11% higher compared to the same period in the more normal market in 2019.”
Kate Eales, head of regional agency at Strutt & Parker comments: “The market continues to be competitive with demand outweighing supply, driving up house prices across the country. But despite historically low stock volumes dominating headlines over the past few weeks, we’re beginning to see incremental increases in the number of homes coming to the market as we enter spring. The increase in demand for larger homes is evident as buyers search for more space including room for a home office. The trend of a significant number of people planning to work from home for three days a week or more in the longer term has created new hotspots across the country for part-time commuters including Shropshire, North Cotswolds and Suffolk. Regional price increases have been bolstered by buyers who have adapted to this competitive market by looking to neighbouring towns and villages to what may have been their preferred location.”
The House Price Index is the largest, most up-to-date monthly sample of residential property asking prices. The index monitors changes in house prices both annually and monthly, providing a comprehensive view on the current state of the property market in England, Scotland and Wales.
Based on circa 95% of newly marketed property, the Rightmove House Price Index is the leading indicator of residential property prices in England, Scotland and Wales.